Three-way catalysts (TWC) are the key technology to reduce emissions of pollutants from stoichiometric engines. Perovskite-type catalysts of general formula ABO(3 +/-delta) (A = La, Y; B = Mn, Fe) containing 2 wt% Pd were produced by flame spray synthesis (FSS) using metal nitrate precursors. The structural properties of the catalysts were characterized by X-ray diffraction (XRD), surface area determination (BET) and transmission electron microscopy (TEM). Crystalline metal oxide nano-particles of 20 nm average size were accompanied by minority La2O3 and Y2O3 phases. The state of Pd in the catalysts was characterized using X-ray photoelectron spectroscopy (XPS), X-ray absorption near edge spectroscopy (XANES) and CO adsorption by infrared spectroscopy. Metallic Pd coexisted with Pd in oxidation state +2 and higher on all fresh samples. TEM confirmed the presence of dispersed Pd particles 2-5 nm in diameter. Therefore, under the chosen synthesis conditions, FSS provides supported palladium nano-particles rather than a solid solution. PdO was the dominant Pd species after calcination at 700 degrees C. The TWC activity was tested in a simulated stoichiometric gas mixture comprising CH4, CO, NOx, and O-2. PdO in combination with YFeO3 +/-delta exhibited the lowest temperature for CH4 oxidation (T-50 = 450 degrees C), which was ca. 100 degrees C lower than that of the sample obtained by the conventional wet-chemical method. After cycling under reaction conditions up to 850 degrees C, a large improvement of catalytic activity for CH4 oxidation was observed which associated with the formation of metallic Pd particles (ca. 20 nm) and the hexagonal -> orthorhombic phase transition of YFeO3 +/-delta. (C) 2013 Elsevier B.V. All rights reserved.